The British Pound crosses remain under pressure, especially GBPCHF and GBPCAD. The former may be declining in the early stages of a 5th wave that will end below 1.9421.
The GBPCHF could break through 2.0963 in order to complete a larger correction that began at 1.9421. However, the advance to 2.0963 was in 3 waves so it is very much possible that the corrective advance is complete and that the next move is lower in a 5th wave…to below 1.9421.
The GBPCAD remains range bound. The pair has been forming a triangle pattern since the multi-year low at 1.9011. We wrote last week that “another leg down in the triangle could test 1.93 or so before a bounce. Bigger picture, triangles are continuation patterns, so a continuation of the longer term downtrend is likely eventually.” Favor the downside until the support line near 1.9420.
The GBPAUD decline is probably a 4th wave within the 5 wave bull cycle from 2.0295. This 4th wave could unfold as a triangle, which makes the pair a good range trading candidate over the next several weeks between 2.13 and 2.18/20.
The GBPNZD broke below channel support at the end of last week (Friday the 15th to be exact) and the next potential support level is from the line drawn off of the February and June lows. Divergence among price and RSI suggest a sharp pullback is likely near term. Resistance is former support just above 2.65.
Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals every weekday morning (9 am EST), COT analysis (published Monday mornings), and analysis of currency crosses throughout the week. He is also the author of Sentiment in the Forex Market.
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